Foriegn Company - Permanent establishment

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Iqbal Singh Grover (Querist)

14 July 2011 A foreign company having a PE in india, having income from technical services..

What is the tax treatment for the same ?
Can we use section 115A or do we have to compute it @40% as per 44DA ??

Is there any beneficial clause in the DTAA ??

As per my understanding, the tax has to be computed as per 44DA @40% on the net profit..

Kindly advise...

CA MANOJ GUPTA

CA MANOJ GUPTA (Expert)

15 July 2011 ASW PER THE FACTS GIVEN SECTION 44DA WILL APPLY

CA MANOJ GUPTA
JODHPUR
09828510543

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Iqbal Singh Grover

Iqbal Singh Grover (Querist)

15 July 2011 And is there any relief in the DTAA ?

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

15 July 2011 which DTAA are you talking of?

And the PE should be effectively connected with the provision of services by non-resident.

Anuj
0-9810106211

Iqbal Singh Grover

Iqbal Singh Grover (Querist)

16 July 2011 Oh.. Its a UK based company..

Yes, the PE is effectively connected with the provision of services..

CS Bijoy

CS Bijoy (Expert)

16 July 2011 Actually DTAA is giving relief that the same Income will not be taxed twice, and here the income is accrued and received in India so section 44DA will apply.

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

16 July 2011 DTAA says that in case of Permanent Establishment ,income shall be taxed as per provisions of domestic law, hence sec 44DA will come in picture.

Also service tax liability shall also arise.

Anuj
+91-9810106211

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